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Central Bank Issues Historic Penalty: Adhering to Crypto Regulations Is Now Essential

Central Bank Issues Historic Penalty: Adhering to Crypto Regulations Is Now Essential

Bitget-RWA2025/11/07 21:36
By:Bitget-RWA

- Ireland's Central Bank fined Coinbase Europe €21.5M for AML/CFT failures, marking its first crypto enforcement action. - Systemic flaws allowed 30M unmonitored transactions (€176B) due to software errors and governance gaps. - Regulators emphasized crypto compliance urgency, citing MiCA regulations and law enforcement collaboration risks. - Coinbase acknowledged technical errors but faced reduced penalties via early settlement under regulatory programs. - Case highlights EU's intensified crypto oversight

The Central Bank of Ireland has levied a €21.5 million penalty against

Europe Limited due to major shortcomings in anti-money laundering (AML) and counter-terrorist financing (CFT) controls, representing the regulator’s inaugural enforcement action targeting a crypto business, as stated in . The fine was issued after a widespread failure in Coinbase Europe’s transaction monitoring from April 2021 to March 2025, during which more than 30 million transactions—totaling €176 billion—were not adequately checked for suspicious activity, according to . The Central Bank characterized these failures as “serious and persistent,” highlighting that the cross-border and pseudonymous features of crypto assets require robust compliance, as reported by .

The regulator determined that misconfigurations in Coinbase Europe’s monitoring software led to five out of 21 screening scenarios not functioning as intended. For example, the system did not properly process special characters such as ampersands in crypto wallet addresses, which allowed some transactions to evade automated scrutiny, according to

. As a result, about 31% of the company’s transaction volume during that timeframe was not monitored. Coinbase took nearly three years to review these transactions retroactively, ultimately submitting 2,708 suspicious transaction reports (STRs) related to money laundering, fraud, drug offenses, cybercrime, and child exploitation, as noted by .

Coinbase Europe attributed the issues to “coding errors” but also admitted to governance failures in its handling of the situation. The firm said it resolved the technical faults within weeks of discovery and has since strengthened its compliance systems. Nevertheless, the Central Bank emphasized that delegating monitoring duties to a global provider does not exempt a local entity from responsibility under Irish regulations, as reported by Crypto.news. The penalty was reduced by 30% from the original €30.7 million due to an early resolution under the regulator’s Undisputed Facts Settlement procedure, according to Yahoo Finance.

This regulatory action highlights the growing regulatory focus on crypto companies throughout Europe. With the EU’s Markets in Crypto-Assets Regulation (MiCA) approaching implementation, authorities are placing greater emphasis on system security and real-time oversight. Colm Kincaid, Deputy Governor for Consumer & Investor Protection at the Central Bank, cautioned that delays in reporting suspicious transactions “seriously hinder law enforcement’s ability to detect, investigate, and prosecute crimes,” and urged the sector to treat AML/CFT responsibilities as “non-negotiable,” as stated in the Central Bank’s press release.

Coinbase Europe, a subsidiary of the U.S.-headquartered Coinbase Group, has accepted the fine, which is now pending approval by the High Court, according to the Central Bank’s press release. The Central Bank noted that this marks its 162nd enforcement action, with cumulative fines surpassing €428 million since the program began, as reported by Coinpaper. For crypto businesses, this case serves as a warning: even seemingly minor technical lapses in compliance can leave large volumes of transactions vulnerable to misuse, resulting in severe regulatory penalties.

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Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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